Take someone earning KES 150,000 gross a month who pays KES 30,000 a month across all loans and credit. After the standard Kenyan deductions, net pay is about KES 105,130. The debt-service ratio that lenders care about is monthly debt over net pay, so KES 30,000 divided by KES 105,130 is about 28.5%. Measured against gross pay instead, the ratio is KES 30,000 over KES 150,000, which is 20%.
Item
Value
Gross monthly pay
KES 150,000
Net monthly pay
KES 105,130.15
Monthly debt payments
KES 30,000
Debt-service ratio (on net)
28.5%
Debt-to-income (on gross)
20.0%
Net left after debt
KES 75,130.15
At 28.5% the borrower sits inside the usual one-third limit, with about KES 75,130 of net pay left after servicing debt. The chart below shows how much of net pay goes to debt and how much remains.
How it is calculated
The tool reports two ratios. The debt-service ratio divides your total monthly debt repayments by net pay, the cash actually available after statutory deductions, and this is the figure most Kenyan lenders assess. The debt-to-income ratio divides the same repayments by gross pay, the version often quoted internationally, so it always reads lower than the net ratio. Net pay comes from running your gross through the full payslip, deducting NSSF, SHIF, the Housing Levy, and PAYE after the personal relief. A common lending benchmark in Kenya is that debt should not exceed roughly one-third of net pay, and many lenders will not approve fresh credit much above that. Counting all obligations, mortgage or rent commitments, car and personal loans, mobile loans, and SACCO repayments, gives the truest picture. The amount left after debt is what funds living costs and saving, so a lower ratio means more breathing room and a stronger application for any new borrowing.
Frequently asked questions
What is a good debt-to-income ratio in Kenya?
Debt-to-income compares your monthly loan repayments with your income. Many Kenyan lenders limit repayments to about a third of net pay, and some regulators reference a similar cap. A ratio below one third leaves room for living costs and new borrowing, while a ratio above that suggests you are stretched and may struggle to get further credit. This tool shows the ratio on both gross salary and net take-home pay.
Why do Kenyan lenders use net pay rather than gross pay when assessing debt?
Net pay is the money that actually hits your bank account after PAYE, NSSF, SHIF and the Housing Levy are deducted. Lenders use it because statutory deductions are non-negotiable, so measuring your debt burden against gross pay would overstate what you can actually spend on repayments. A ratio that looks comfortable on gross can look very different on net, which is why this tool shows both figures and flags the net-pay benchmark.
Which debts should I include when calculating my debt-to-income ratio?
Include every regular monthly repayment obligation: mortgage or rent if you have a home loan, car loans, personal bank loans, SACCO loan repayments, mobile loans such as M-Shwari or Fuliza if they carry a fixed monthly charge, and any credit card minimum payments. Leaving out smaller obligations like mobile loans understates the true ratio and can lead to taking on more debt than you can comfortably service.
How does the debt-service ratio affect my chances of getting a new loan in Kenya?
Most commercial banks and microfinance institutions in Kenya will decline or reduce a loan application where the resulting debt-service ratio on net pay would exceed roughly one third. Credit Reference Bureau reports also factor in existing obligations. If your current ratio already sits close to that threshold, clearing one smaller debt before applying for a larger one can significantly improve your application, since each cleared obligation reduces your monthly commitments and improves the ratio.